Taft, Maricopa and other western Kern County communities suffer from poor broadband infrastructure and limited Internet access. Steve Blum, president of Tellus Venture Associates, conducted a workshop to evaluate alternatives and plan improvements in Taft on 2 December 2014.

1. TellusVenture
Associates
®
© 2014 TellusVenture Associates
Taft community
broadband
planning workshop
2 December 2014
• Upgrade Verizon network
• CASF grant possible, 60%-70% of cost
• Recruit a CLEC
• Evaluate local policies, assets
• Community networks
• Consumer, e.g. Loma Linda, Brentwood
• Business, e.g. San Leandro, Watsonville
Infrastructure

2. © 2012 TellusVenture Associates
Agenda Taft, 2 December 2014
1. Introductions
2. Broadband 101
3. Taft/Maricopa broadband assessment
4. Questions
5. Discussion: local needs and resources
6. Discussion: next steps
7. Close

3. TellusVenture
Associates
®
© 2014 TellusVenture Associates
Broadband 101

4. © 2012 TellusVenture Associates
Broadband is a digital
connection
Delivers TV, telephone, Internet,
internal connectivity

5. © 2012 TellusVenture Associates
Broadband is digging
and rigging
It’s not rocket science

6. © 2014 TellusVenture Associates
Broadband is economic
development
Bandwidth is a basic
requirement for business
location decisions
Rank City 2Q11 Ave. Mbps
1 San Jose, CA 13.7
2 Fredericksburg, VA 8.5
3 Monterey Park, CA 8.2
4 Fremont, CA 8.2
5 Staten Island, NY 7.6
6 Columbia, MD 7.5
7 Jersey City, NJ 7.5
8 Riverside, CA 7.5
9 Oakland, CA 7.5
10 Fairfield, CA 7.3
Top U.S. Cities
Average Measured Connection
Speed
Source: Akamai
Broadband’s Effect on San
Joaquin County Employment
Jobs
210,000
225,000
240,000
255,000
270,000
2005 2007 2009 2011 2013 2015
Nominal
High broadband growth
Source: Sacramento Regional Research Institute
Almost 50K job-years created by
improved broadband access

7. © 2014 TellusVenture Associates
A tale of two cities San Leandro & King City
{Geek}
is the new
Sexy

8. © 2014 TellusVenture Associates
It begins with the middle mile Distance & location matter
Los Angeles
San Jose
June Lake
Salinas
King City
Reno
Barstow
Santa Cruz
50¢ per Mbps
$135 per Mbps$10 per Mbps
You're kidding,
right?

9. © 2014 TellusVenture Associates
Accessible middle mile
fiber lowers costs
Otherwise, you’re at the mercy
of Comcast, Charter, AT&T
Salinas
Gonzales
Soledad
Los Angeles
San Jose
Watsonville
King City
Santa Cruz
50¢ per Mbps
$10 per
Mbps?
$10 per Mbps
A solvable
problem

10. © 2014 TellusVenture Associates
Last mile determined by
cost & value of customer
Even when subsidized, ROI
might not support capex
Mammoth Lakes
10x speed,
same price

11. © 2013 TellusVenture Associates
And then the
competition
shows up...
Local trunk
fiber
Leased
DSL line
Carson City
Digital 395 fiber
Leased fiber
Fiber laterals
US395
long haul
access point
MAE West
Tier 1 access
Los Angeles Barstow
Digital
395
fiberLeased fiber
San Jose
1 Wilshire
Tier 1 access
June Lake
CPE
CPE
CPE
Mammoth Lakes
10x speed,
same price
Reno
Fixed
wireless
NOC
Telco
office
Local ventures
can take on
incumbents

12. © 2013 TellusVenture Associates
Cities of San Leandro, Palo Alto,
Santa Clara in dark fiber business
Chattanooga building fiber to the
home, offers Gigabit service
Even so, communities are
developing broadband
Willing to invest in
infrastructure & partner with
private companies
City of Lompoc runs a wireless
Internet utility
Cities of Benicia, Brisbane
lighting up industrial parks
Private communities evaluate,
partner on fiber systems
IP Networks, local
groups partner on north
coast fiber build

13. TellusVenture
Associates
®
© 2014 TellusVenture Associates
Taft/Maricopa broadband assessment

14. © 2014 TellusVenture Associates
Three elements of
broadband development
Success comes from
community partnerships
Access AdoptionInfrastructure

15. © 2014 TellusVenture Associates
Middle mile fiber available
Two cables through Taft, one
(two?) bypasses Maricopa
Infrastructure

16. © 2014 TellusVenture Associates
Wireless availability is
substandard, overstated
Consistent with typical findings
by CPUC in rural California
Infrastructure

17. © 2014 TellusVenture Associates
Only one wireline provider
with limited coverage
Bright House reports seem generally
accurate but not validated by CPUC
Infrastructure

18. © 2014 TellusVenture Associates
Infrastructure is
“D” & “F” grade
Bright House meets standards,
Verizon doesn’t even offer service
F
D
C
B
A
Infrastructure

19. © 2014 TellusVenture Associates
Bright House pricing consistent
with California norms
Cable is not generally a low
cost option
Access
+$10/month
modem
&
W
iFi
Bright House Service Plans
Download
speed
Upload
speed
Introductory
rate, 1 year Full price
1 Mbps 512 Kbps $24.25 $40.00
10 Mbps 1 Mbps $37.00 $57.00
30 Mbps 2 Mbps $60.00 $77.00
60 Mbps 5 Mbps $78.00 $93.00
90 Mbps 10 Mbps $93.00 $108.00
(As of 21 July 2014)
• Lowest cost bundle
$108/mo, 12 months
• Goes up by “$5 to $10”
• $10 Connect2Compete
program not offered

20. © 2014 TellusVenture Associates
Local broadband penetration
rates below average
Consistent with other areas with
low infrastructure grades
Adoption
FCC method/data:
20% to 40% adoption
in Taft/Maricopa area
CPUC method/data:
61% in Kern County
74% statewide
45% in rural areas

21. © 2014 TellusVenture Associates
Options
Consider combining federal,
state, local financing
Infrastructure
• Upgrade Verizon network
• CASF grant possible, 60%-70% of cost
• Recruit a CLEC
• Evaluate local policies, assets
• Community networks
• Consumer, e.g. Loma Linda, Brentwood
• Business, e.g. San Leandro, Watsonville

22. © 2014 TellusVenture Associates
Options
Working together, local
communities have clout
Access
• Work with Bright House to
implement Connect2Compete
• Participate in Open Internet,
Comcast merger, Copper transition
proceeds at FCC, CPUC
• Leverage grants & local budgets
• E-rate, Telemedicine, Public Safety
• Pursue CPUC public housing grants

23. © 2014 TellusVenture Associates
Options
Active, enthusiastic involvement
of service providers is essential
Adoption
• Community-based programs –
• Oakland Technology Exchange West
• Loaves, Fishes, Computers - Salinas
• CPUC consortia program
• CPUC public housing program
• CETF Get Connected program

24. © 2014 TellusVenture Associates
Questions?

25. © 2014 TellusVenture Associates
Local needs & resources?

26. © 2014 TellusVenture Associates
Next steps?

27. TellusVenture
Associates
®
© 2014 TellusVenture Associates
Back-up slides

28. © 2014 TellusVenture Associates
Fixed wireless is overstated
and expensive
Costs $350 per month to meet
minimum CPUC standard
Infrastructure

29. © 2014 TellusVenture AssociatesTellusVenture Associates
Grading wired broadband infrastructure
F
Astound (or Sonic) and/or Comcast and/or AT&T offering their best levels of
service.
Comcast Xfinity cable modem service and mid-level AT&T Uverse DSL.
AT&T DSL and Comcast cable modem service.
Only one provider, e.g. AT&T or Comcast or Winters Broadband, meets spec.
Service via outdated DSL equipment or nothing at all.
D
C
B
A

30. TellusVenture Associates
Residential broadband grading criteria
F
Two competing providers, both advertising maximum download speeds of at
least 25 Mbps and maximum uploads speeds of 6 Mbps, or 3 or more
competing providers offering that standard of service in combination.
Competing providers, both advertising maximum download speeds of at least
10 Mbps and maximum uploads speeds of 6 Mbps.
Competing providers, one advertising max down/up speeds of at least 10/6
Mbps and the remainder meeting CPUC's minimum 6 down/1.5 up standard.
At least one provider advertising speeds that meet the CPUC's minimum
standards of 6 Mbps down and 1.5 Mbps up.
At least one provider offers service, but no service is available that meets the
CPUC's minimum standard of 6 Mbps down and 1.5 Mbps up (underserved).
Or no service at all (unserved).
D
C
B
A

31. © 2014 TellusVenture Associates
Broadband value chain
Not a lot different from water,
electricity
• Tier 1 Internet connection
• Bandwidth
• Long haul fiber
• Maybe several providers
• Long haul access point
• Middle mile fiber
• Central office/NOC
• Local trunk distribution fiber
• Lateral fiber
• Customer drop
• Customer premise equipment
Local trunk
fiber
Leased
DSL line
Carson City
Digital 395 fiber
Leased fiber
Fiber laterals
US395
long haul
access point
MAE West
Tier 1 access
Los Angeles Barstow
Digital
395
fiberLeased fiber
San Jose
1 Wilshire
Tier 1 access
June Lake
CPE
CPE
CPE
Mammoth Lakes
10x speed,
same price
Reno
Fixed
wireless
NOC
Telco
office

32. © 2014 TellusVenture Associates
Broadband value chain
The higher up the chain, the
greater the competition and the
lower the margins
Layer Revenue Margin Competition
Water
Analogy
Internet
$1K/ mo and
up
Low
<10-20%
High Water
Ethernet/
electronics
Not common Medium Make vs. buy Pump
Fiber optic
cable
Local loop
$1-5K/mo
Medium Few to none Pipe
Conduit 20¢-$2/ft/year
High
100%+
None
Trench/
Right of way

33. Communities turn
conduit into gold
• Lit San Leandro is an 11 mile fiber
system through commercial &
industrial areas, built with city
conduit, $2 million in private
capital.
• Palo Alto netting more than $2
million a year with dark fiber on
city poles and conduit.
• Watsonville saving millions of
dollars.
TellusVenture Associates

34. © 2014 TellusVenture Associates
Core policies, practices
identified and evaluated
Goal is to make broadband a
routine policy consideration
and planning element
• Broadband requirements for new development, renovations
• Prioritizing broadband as a planning criterion
• Commercial/industrial vs. residential
• Anticipating and accommodating future needs
• Broadband conduit in CIP, public works,
transportation projects
• Open trench policies
• Right of way and encroachment policies
• Conduit, pole, site leasing
• GIS integration
• Wireless site, towers and antenna policies
• Environmental and aesthetic issues
• Telecommuting
• Public services and digital inclusion
• Digital literacy and workforce
development
• Systems interoperability, open data
programs

35. © 2014 TellusVenture AssociatesTellusVenture Associates
Five last mile projects for
three counties
Surfnet in Santa Cruz &
Monterey, Pinnacles Telephone in
San Benito, Etheric wireless
region-wide

36. TellusVenture
Associates
®
© 2014 TellusVenture Associates
Contact:
Steve Blum
Tellus Venture Associates
+1-831-582-0700
steveblum@tellusventure.com
www.tellusventure.com
Taft community broadband planning workshop
2 December 2014